Business Inventories and Sales Up in September

Washington, Dc, November 16, 2005–Sales rose faster than inventories in September, leading stockpiles of goods to fall to record low levels, the Commerce Department said Wednesday.

Inventories at U.S. businesses rose 0.5% in September, while sales jumped 0.6%. As a result, the inventory-to-sales ratio, an indication of demand, tightened to a record 1.25 months.

The increase in inventories in September was larger than expected. Economists were expecting inventories to rise 0.3% in September.

Sales rose a revised 0.7% in August, while inventories rose 0.4%.

Retail inventories, which rose 0.9% for the second straight month, led by higher auto inventories as sales of cars and trucks fell off in the month.

Retail auto inventories rose 2.1%, the largest gain since June 2004. Excluding autos, retail inventories rose 0.4% in September.

The inventory-to-sales ratio in retail rose to 1.46 months from 1.45 months.

In September, manufacturing sales fell 0.5%, while inventories slipped 0.1%. The inventory-to-sales ratio rose to 1.18 from 1.17.

For wholesalers, sales rose 2.4% while inventories rose 0.6%. The inventory-to-sales ratio fell to 1.15 in September from 1.17 in August.